Will families pay Income Tax on money received from employer or others after Covid death? Check new rule

The Central Government on Friday (June 25) announced tax relief for families of those who have lost their lives due to Covid-19 since FY 2019-20. The Government has decided to provide income tax exemption on any amount received by the family of an employee from the employer. Also, exemption up to Rs 10 lakh has been provided for any amount received from any other person other than the employer.

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The Ministry of Finance said in a statement, “Unfortunately, certain taxpayers have lost their life due to Covid-19. Employers and well-wishers of such taxpayers had extended financial assistance to their family members so that they could cope with the difficulties arisen due to the sudden loss of the earning member of their family.”

The Ministry further said, “In order to provide relief to the family members of such taxpayer, it has been decided to provide income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years.”

According to the official statement of the Ministry, the exemption will be “allowed without any limit for the amount received from the employer” and “the exemption shall be limited to Rs. 10 lakh in aggregate for the amount received from any other persons.”

(The article is posted from Financial Express without any modification.)